If the title to a leased asset does not transfer to the lessee at the end of the lease term,but the lessee guarantees the residual,what is the period and residual value used by the lessor to depreciate the leased asset?

Question

Quizplus · Accepted Answer

In this scenario, the lessor will use the original lease term and residual value to depreciate the leased asset, as the title of the asset does not transfer to the lessee at the end of the lease term. Option B is the only choice that mentions using the original lease term and residual value for depreciation.

If the Title to a Leased Asset Does Not Transfer